A September 2021 study on the economic impact of open source software and hardware concluded that open source technologies injected EUR 65-95 billion into the European economy. This study is timely given the current rollout of the European Union's EUR 750 billion recovery investment, which has allotted 20% for digital transformation. Growing political efforts to understand and quantify the importance of open source in realizing EU digital sovereignty accentuate the study's significance. The European Union sponsored the study, which was written by Fraunhofer ISI and OpenForum Europe.
During the February 2021 EU Open Source Policy Summit's keynote, EU Commissioner Thierry Breton emphasized the European Union's leadership in using open source software (OSS) across all technical, political, and economic domains. This study provides yet more hard economic evidence to support the commissioner's assertion that using and contributing to open source is vital to European economic recovery—not only in terms of bolstering public sector adoption but also for industrial strategy.
Herewith, a few highlights from the report:
- In chapter 2, the study summarizes around 3,000 publications, academic research, and related trends supporting the impressive economic impact of open source. The next two chapters (chapters 3 and 4) explain its methodology, which ideally will encourage reuse and comparisons in other similar market studies. The study also contains a useful examination of business models that provide an impressive OSS cost-benefit ratio of above 1:4 for those who use and contribute. In many cases, that is possibly a conservative ratio! More impressively, the report also calculates that every 10% increase in contribution generates 0.4-0.6 GDP points.
- The authors analyze GitHub data from 180 countries (chapter 5), underscoring, among other insights, that the EUR 65-95 billion economic impact is the result of global collaboration. This finding serves as a warning against the idea, floated by some, of creating a "European open source."
- Half of the contributions to open source technology in Europe come from the information technology sector (ICT). However, increasing contributions from other European industries—notably, manufacturing, retail, and banking/insurance—suggest that more attention ought to be given to supporting open source in European companies. Finally, developers employed by businesses are now the major contributors to code; OSS has shed its DIY reputation.
- Open source significantly boosted small and mid-size enterprises (SMEs), Europe's most important horizontal economic stakeholders. Growth is reflected in the increased creation of ICT startups, at more than 650 per year. Cutting-edge SMEs that increasingly rely on open innovation and access to and retention of IT talent are also making upstream contributions.
- Finally, the study offers policy-related findings (chapter 8) and suggested recommendations (chapter 9). I encourage readers to review and assess this study and share suggestions ahead of the EU Open Source Policy Summit on February 4, 2022. Red Hat is a sponsor of the event.
The following table is taken from chapter 8 of the study. It compares several countries based on their scores in eight areas of open source policy. My thoughts on this analysis follow.
The study utilized several assessment methodologies, including Red Hat-Georgia Tech research and Spain's Cenatic. Incidentally, I wonder whether it is appropriate to have a collaborative approach to updating the data in a way that reflects the European Union's current digital (DESI) indicators of European digital performance. As for the country rankings, I view such tables with a bit of skepticism, but these are my observations:
- I was a bit surprised with the zero-point rating for Germany in the public sector rankings. Germany has provided the new Service Standard (2020) and improvements to the federal EVB-IT (Ergaenzende VertragsBedingugen-InformationsTechnik) templates and related guidelines, as well as recent announcements for creating an Open Source Program Office (OSPO). This discrepancy surely needs teasing out at the upcoming summit.
- The coverage of the EU institutions was, I think, closer to the mark. A 20-year+ OSS strategy (now into its fifth iteration, with a strong emphasis on OSPO-enabled coinvention) has accelerated the adoption of open source. The European Union's current leadership is well placed to play an important role in bolstering open collaboration across the European Union. The power of open source and open standards is also better understood and reflected in the draft legal proposal found in neighboring (i.e., nontechnical or procurement) EU policies in cybersecurity (e.g., NIS 2.0), antitrust (e.g., DMA), and upcoming standards policy.
- Finally, France will take over the EU presidency on January 1, 2022. France is unique both in the way it explicitly includes open source in many breakthrough French laws (e.g., circulaire 5608, loi 7/10/16, and decrét 2017-638) and in the vigor with which open source is used at a political level. This is evident in recent activity in the French Parliament (e.g., the Bothorel report). Open source has even become an electoral issue for the general public, who want better public services that correspond to their values of fairness and freedom.
Kudos to the European Union for investing in this study and for its ongoing thought leadership. The study provides useful, shareable, and reusable insights for governments and companies across the European Union at this time of recovery. There has never in the European Union's history been such a strong imperative to collaborate and tackle the world's largest challenges together. Red Hat and fellow OFE supporters look forward to discussing all these important insights with you on February 4, 2022, at the next European Open Source Policy Summit!